IRS Arrests Tax Foe in $6-Million Fraud Case

Lynne Meredith, an antitax activist who speaks frequently at seminars across the country, once boasted that she has never paid income taxes and hasn’t received so much as a letter or phone call from the Internal Revenue Service.

All that changed Monday, however, when federal authorities chose the tax-filing deadline to arrest Meredith and six colleagues on charges that they bilked victims out of more than $6 million in a worldwide tax fraud scam.

Meredith, a 52-year-old Sunset Beach resident, was also charged with failure to file income tax forms and of persuading followers to file fraudulent returns and make bogus complaints to the IRS.

A 35-count grand jury indictment said Meredith and the others sold bogus “pure trusts”--which Meredith said would prevent holders from ever having to pay income taxes.

The trusts were sold through Meredith’s We the People organization, which is also known as Free the People, Sovereignty Pure Trusts and Liberty International. Authorities alleged that Meredith and others charged as much as $500 apiece and established the trusts using false IDs and bogus Social Security numbers.

“Meredith misled numerous people into believing that the tax shelters she was selling would legally keep them from having to pay income taxes,” said Michael S. Kochmanski, special agent in charge with the IRS criminal investigations office in Los Angeles. “Instead, many of these people now find themselves owing back taxes, penalties and interest.”

Meredith could not be reached for comment Monday, and an employee at her office declined to comment. Some of her followers, however, immediately criticized the U.S. attorney’s office for filing charges and said Meredith has done nothing illegal.

For more than a decade, Meredith has traveled the nation giving seminars on how to avoid paying income taxes. The others charged with one count of conspiracy and 11 counts of mail fraud were trust salespersons employed by Meredith. They were Gayle Bisbee, 54, of Sunset Beach; Gregory Paul Karl, 52, of Solana Beach; Teresa Manharth Giordano, 39, of Murrieta; Willie Watts, 43, of Murrieta; Betty Erickson, 57, of Windsor; and Nadia Moore, 53, of Huntington Beach.

Assistant U.S. Atty. Alicia Villarreal said Meredith’s arrest on April 15 was an unintended irony. Villarreal said authorities had planned to arrest her Friday but postponed that action so Meredith could attend funeral services for her mother over the weekend.